This is a blog about the importance of customer retention. The post elaborates on how to increase profits by focusing on your customers and what kind of strategy you should employ for that purpose. Customer retention strategies are a great way to increase profits. They can be done through various methods, such as surveys and customer feedback. These methods help companies keep customers from leaving and make them more likely to buy again in the future. It’s a frequent misperception that it must gain more consumers if a company wants to produce more money. Obtaining new consumers is advantageous and may aid in expanding your organization. However, this isn’t the only strategy to increase your revenues. A marketing approach that focuses on client retention is much more feasible and cost-effective. Acquiring a new client will cost you six to seven times more than retaining an old one. Not only is retention less expensive than acquisition, but it also delivers a far higher return on investment. According to research, even raising your retention rates by 5% may boost your profitability by anywhere from 25% to 95%. Consider how much more money you might generate if you increased your retention rates by 10% or even 20%. Don’t get me wrong: I’m not suggesting you abandon your acquisition attempts entirely. However, if you’re on a tight budget, it’s advisable to concentrate on your current clients. Take a peek at these online brand loyalty statistics:
As you can see, consumers who have made several transactions with a brand have a greater add-to-cart rate and conversion rate than new customers. These clients also bring in more than six times as much money every session as new customers. As a result, it’s only natural that you prioritize these consumers. You’ve probably heard the ancient adage, “A bird in the hand is worth two in the bush.” You already have these consumers in your possession. Don’t jeopardize your relationship with them by focusing all of your efforts on client acquisition.
Effective methods for increasing revenues via client retention:
1. Use your blog to build a following of dedicated readers.
Most people don’t think of blogging as a way to keep customers. However, blogging is one of my favorite content marketing techniques in general. Blogging may help you interact with your loyal consumers in addition to increasing website traffic and generating new prospects. This is particularly true with online businesses. Consider the following question. How often does the same consumer return to your site? You don’t receive repeat business from the same consumer every day. However, if you publish new blog entries every day or a few times each week, you’ll offer your visitors a cause to return to your site. With your content, you’ll be able to entice these readers. Your brand will be on their thoughts more frequently if they utilize your items and read your blog.
Furthermore, the more they visit your site, the more likely you will persuade them to purchase something else. This is a very cost-effective method. The time it takes to write each piece is the only significant expenditure. The average time spent writing a blog article in 2017 was three hours.
Using this method to build loyal readers and keep current consumers will be well worth your time and effort.
2. To gather feedback, use surveys and interviews.
It’s critical to understand what leads clients to quit a firm before you can effectively work on retention. According to research, 68 percent of customers terminate a company because they don’t believe the brand values them. Only 14% will quit due to dissatisfaction with your product or service. Furthermore, 9% of your clients left because of your rates. What do you make of this? Customers are much more concerned with how they are treated than with the items and costs of purchasing. Asking your clients directly is one of the most acceptable methods to demonstrate that you care about their thoughts. In addition, you may increase income for your company by conducting surveys and interviews. This technique meets several objectives.
First and foremost, it demonstrates that you care about them, as we have previously shown. However, the findings of these surveys and interviews may also assist you in improving your company. These advertisements will reveal whether you’re doing anything incorrectly or if your brand may require some work. Customers would appreciate it if you could determine what needs to be corrected and make the necessary improvements. This form of service improves the client experience, which I’ll go into more depth later.
3. Make a consumer loyalty program a reality.
The name is self-explanatory. The goal of building a customer loyalty program is to cultivate long-term relationships with consumers. According to research, consumers are far more inclined to purchase at shops that offer loyalty programs.
Give your consumers precisely what they’re looking for. Your loyalty program may be approached in a variety of ways. You may, for example, reward your consumers depending on how often they purchase. These kinds of initiatives have been around for a long time, and I’m sure you’ve engaged in them. A small pizza business may punch customers’ cards in town. They receive a free pizza after ten visits. However, as technology has progressed, this sort of “punch card system” has changed. Thanks to businesses that provide mobile applications, customers no longer need to carry a physical card. As we go on, we’ll go into more detail about mobile applications. If you own an online company, you can keep track of your clients’ purchases by looking at their profiles. Another form of a loyalty program recognizes and rewards your most loyal clients. Let’s assume two clients each purchased ten times from your shop in the previous six months. Should they be compensated in the same way? It makes reasonable to reward the consumer who spends more money if one customer spends $100 and the other pays $1,000. Finally, you may set up a client loyalty program with different spending levels. Each time a new client advances to a higher level, they will earn a more significant advantage. This method encourages your current consumers to spend more money since they know they’ll be rewarded. As a consequence, retaining these consumers will be a lot simpler.
4. Expand your email list.
Email marketing is another excellent technique to concentrate on client retention.
In comparison to other referring channels, email gave the best results for consumers who return to ecommerce websites, as seen in this graph. Your existing customers’ email addresses should be collected. You’ll be able to send them unique offers and promotions after you’ve added their email addresses to your list. This will improve the likelihood of them purchasing from you again. If you don’t remind consumers of these discounts by email, they won’t be making as many repeat purchases. Just don’t go too far with these messages, or you’ll risk backfiring. Don’t bombard your readers with promotional information daily. This will irritate them and result in many unsubscribes from your mailing list. Instead, please provide them with stuff that is useful to them. You can’t go wrong with a discount in most cases. It’s an excellent technique to increase sales from your current consumers.
5. Customer recommendations should be rewarded.
Customer referral programs are often used as an acquisition technique by most firms. While I agree with that, I want you to know that they can also serve as a retention tactic if you set them up correctly. The goal of a referral program is to encourage your present customers to suggest new clients to you. However, most individuals will not do this out of a sense of altruism. Sure, they could appreciate your brand and be satisfied with your items, but do they love you enough to tell their friends and family about it? That is why you must provide a reward for referrals. Take a look at this Airbnb example.
It’s a straightforward design. Customers who suggest a friend will earn a $20 credit whenever the friend secures a vacation. So they’re going to acquire a new client. However, since they wish to use their credit, their current client is motivated to make another transaction. So they will get more money in travel credits if they recommend more individuals. This referral system may be used by your company as well. It will thank your consumers for their efforts and encourage them to make further purchases in the future.
6. Make product recommendations.
Customers should be encouraged to build profiles on your platform. This will allow you to tailor their shopping experience to their preferences. Consumers and companies alike benefit from personalization. These client profiles will enable you to keep track of their previous purchases and browsing habits. You can now utilize this information to provide product recommendations to your consumers.
As these figures show, customers are more inclined to buy from businesses that recommend items based on their previous purchases and browsing habits. Nearly half of customers think companies that customize their shopping experience and send tailored communications make them spend more money. These product recommendations are an excellent method to increase your earnings. Consider the case of an online business that offers athletic items. When consumers add soccer cleats and a soccer ball to their shopping cart, it’s safe to assume they’re interested in playing soccer. So, before they check out and finish the transaction, you may propose shin guards, soccer socks, and a water bottle as goods they might be interested in purchasing. This will assist in raising the average transaction value.
7. Customer service should be good.
When we spoke about utilizing surveys and interviews to collect feedback from your consumers, I mentioned this briefly. Excellent customer service, on the other hand, goes well beyond that. This should be a top priority for your company. Customer service should be ingrained in your company’s culture. From the CEO to the lowest-level staff, everyone in the firm has to understand how to handle consumers. Improving the customer experience can help you increase client retention and loyalty.
Ascertain that you are accessible to assist your consumers. Allow them to contact customer support representatives via as many channels as possible: Just because your firm is open Monday through Friday from 9 a.m. to 5 p.m. EST doesn’t imply your customer service hours stop there. What happens if a consumer on the West Coast has a query at 6 p.m. local time on Friday? Make sure they don’t phone you on Monday morning. Please give them a choice. Make an additional effort to please your consumers. 86 percent of respondents think they are prepared to pay extra for excellent customer service, according to research. That’s correct. If you serve your clients well, you may charge more for your goods and services. They’ll keep coming back to purchase more.
8. Sort your email list into categories.
I previously said that you must add subscribers to your email list. Now I’m asking you to go a step farther with your plan. To get the most out of your email marketing, segment your readers. This may be accomplished in a variety of ways. For example, you may place them in lists depending on their age, gender, or region. With generational marketing, you may further segregate your target population. Organizing your email subscribers into several lists allows you to provide more tailored material to each one. Take a look at a few of the essential advantages of email segmentation:
If you look at each of these advantages individually, you’ll discover that they all lead to the same conclusion. All of these will assist you in increasing your revenues.
9. Create a mobile application.
We live in an age where mobile technology seems to have taken control. When was the last time you saw someone who didn’t have a smartphone in their hand? Building a mobile app may offer a lot of advantages for your company. As I previously said, an app may be used to replace a traditional client loyalty card. You may also utilize your app to execute the other techniques I mentioned, such as a customer referral program, product recommendations, and a survey platform. You may also use your app to enhance your customer service. For example, allow app users to contact a representative from inside the app. In terms of client retention, mobile applications increase the likelihood of an ecommerce consumer returning to your online business within 30 days by 50%.
Shopping cart abandonment rates for mobile applications are likewise meager. The average shopping cart abandonment rate is 68 percent on a desktop site. This ratio climbs to 97 percent when buyers add items to their shopping carts from a mobile browser. The shopping cart abandonment rate for mobile applications, on the other hand, is just 20%. If you use my high-return shopping cart abandonment avoidance strategies, you can further reduce that proportion.
Conclusion
New consumers aren’t the only method to boost your company’s revenues. It is more productive and cost-effective to focus on customer loyalty. Use your blog to encourage more regular visits to your website from your clients. By conducting surveys and interviews, you may show your clients that you care about their perspectives. Make a loyalty program for your customers. Customers that recommend friends and family should be rewarded. To customize your marketing efforts, add consumers to your email list and segment them. Take customization further by suggesting goods based on your customers’ browsing behavior and prior purchases. You may even charge more money for your goods and services if you improve your customer service. Create a mobile app to assist you in implementing these methods and increasing revenue. You’ll be able to increase profitability by focusing on client retention.
Frequently Asked Questions
What are the strategies for customer retention?
A: Customer retention strategies are methods that companies use to ensure customers continue buying their products.
How can you increase five customer retention?
A: By doing employee training and by creating a culture of loyalty.
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